EX-99 2 shireex99.txt EXHIBIT 99.1 For immediate release 7:00 am (EST) 12:00 pm (GMT) SHIRE ANNOUNCES INCREASE OF 50% IN PRE-TAX INCOME FOR FIRST QUARTER 2001 Basingstoke, UK - 26 April 2001 - Shire Pharmaceuticals Group plc (LSE: SHP.L, NASDAQ: SHPGY) announces results for the first quarter ended 31 March 2001. Highlights:
----------------- ----------------------------------------- After APB25 charge1 Before APB25 charge ----------------- ------------- ----------- --------------- Q1-01 Q1-01 Q1-00 % ($m) ($m) ($m) change Revenues 155.6 155.6 119.0 +31 Operating income 39.9 42.0 29.2 +44 Income before tax 38.0 40.1 26.7 +50 EPS (diluted) - per ordinary share 9.9c 10.7c 7.3c +46 - per ADS 29.7c 32.1c 22.0c +46 ----------------- ------------- ----------- ---------------
Average USD:GBP exchange rate Q1 2001 1.44 Q1 2000 1.60 Financial Highlights o Adderall* sales up 29% with a 33.3% share2 of the US Attention Deficit Hyperactivity Disorder (ADHD) prescription market in March 2001 (March 2000: 29.7%). o Agrylin* continues to grow strongly; US prescriptions increased by 43% in March 2001 compared to March 2000. Sales grew 56% compared with the same period last year. Agrylin* achieved 20.4% market share2 of the combined US Agrylin, Hydrea and hydroxyurea market. Pentasa* sales up 39% on Q1 2000; achieved 17.8% share2 of the US oral mesalamine/olsalazine market in March 2001. o Carbatrol* achieved sales growth of 72% and 32.5% share2 of the US extended release carbamazepine market in March 2001. o ProAmatine* sales up 112% on Q1 2000; US prescriptions up by 31% on the same period last year. Business Highlights o Anagrelide (marketed as Agrylin* in US) granted Orphan Drug Status in Europe. Reminyl* receives Food and Drug Administration (FDA) approval on 28 February 2001. US launch targeted for May 2001. o Foznol* (lanthanum carbonate) first regulatory filing in Europe on 13 March 2001. US regulatory filing expected by end of Q4 2001. o Adderall XR* (SLI 381) Phase III data to be presented at the American Psychiatric Association (APA) on 9 May 2001. Commenting on the results, Rolf Stahel, Chief Executive of Shire, said: "I am delighted to announce excellent first quarter results, with outstanding revenue growth of 31% and an increase of 50% in pre tax income. "Following the approval of Reminyl* in the US on 28 February 2001, we are looking forward to the US launch by Janssen Pharmaceutica and Ortho-McNeil Pharmaceutical. Their intention is to make Reminyl* available on prescription during the course of May 2001. In addition, the first filing of Foznol* in Europe achieves another very important milestone for Shire. "In respect of the proposed merger with BioChem Pharma Inc, although the current review period with Industry Canada expires on 27 April 2001, Shire requested an extension on 25 April 2001. "Discussions with Industry Canada are ongoing and we remain firmly committed to obtaining the Canadian Minister of Industry's approval for the proposed merger with BioChem Pharma Inc". 1 Results stated after APB25 charge are as set out in Shire's consolidated income statement on page 9 2 Prescription market (IMS) March 2001 *Trade Mark For further information please contact: Clea Rosenfeld, Investor Relations Manager +44 (0)1256 894 000 Shire Pharmaceuticals Group plc David Yates +44 (0) 207 831 3113 Financial Dynamics Paula Schwartz +1 212 661 8030 Financial Relations Board Notes to editors Shire Pharmaceuticals Group plc Shire is a rapidly growing international specialty pharmaceutical company with a strategic focus on four therapeutic areas: central nervous system disorders, metabolic diseases, oncology and gastroenterology. The Group has a sales and marketing infrastructure with a broad portfolio of products, with its own direct marketing capability in the US, Canada, UK, Republic of Ireland, France, Germany, Italy and Spain and with plans to add Japan by 2004. Shire also covers other significant pharmaceutical markets indirectly through distributors and sales coverage continues to grow. Shire's global search and development expertise has to date successfully provided eight marketed products, of which Reminyl* for the treatment of Alzheimer's disease has recently been launched in the UK, its first market in Europe. The National Institute of Clinical Excellence (NICE) recommended on 19 January 2001 that treatment for Alzheimer's disease be made available through the National Health Service (NHS) in the UK. Additionally, on 28 February 2001 Reminyl* received Food and Drug Administration (FDA) approval to be marketed in the US. The current pipeline of 17 projects includes three projects in registration in various countries, plus the delivery of the first regulatory submission for Foznol* to a Reference Member State in the EU Mutual Recognition Procedure on 13 March 2001, and 6 others that are post Phase II. Shire is actively seeking to acquire further marketed products and development projects to enhance the potential for future growth. Shire's M&A activity has resulted in five completed mergers and acquisitions during the last six years. On 11 December 2000, Shire entered into an agreement to merge with BioChem Pharma Inc. to form a leading global specialty pharmaceutical company. More details on this proposed merger and other aspects of the company are available on the Shire website at Error! Bookmark not defined. *Trade Mark THE "SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. The statements in this press release that are not historical facts are forward-looking statements that involve risks and uncertainties, including but not limited to, risks associated with the inherent uncertainty of pharmaceutical research, product development and commercialisation, the impact of competitive products, patents, and other risks and uncertainties, including those detailed from time to time in periodic reports, including the Annual Report filed on Form 10K by Shire with the Securities and Exchange Commission. OVERVIEW OF FINANCIAL RESULTS Group revenues for the first quarter increased by 31% to $155.6 million (Q1 2000: $119.0 million). The Group recorded income before tax and APB25 charge of $40.1 million, up 50% (Q1 2000: $26.7 million) and diluted earnings per ordinary share pre APB25 charge of 10.7 cents or 32.1 cents per ADS, up 46% (Q1 2000: 7.3 cents per ordinary share or 22.0 cents per ADS). Net income (after APB25 charge of $2.1 million) was $26.0 million (Q1 2000: $4.3 million net loss after APB25 charge of $23.2 million). Sales and marketing Product sales, at $151.4 million, increased by 34% over Q1 2000. Sales of Adderall* were $70.1 million, representing growth of 29% on the comparative period in 2000, which included some stock-building by wholesalers ahead of anticipated price increases. Adderall* had a 33.3% share of the prescription market for Attention Deficit Hyperactivity Disorder (ADHD) in the US in March 2001 (March 2000: 29.7%) and continues to be the brand leader in the US market for ADHD. Sales of Agrylin*, the only US product licensed for the treatment of thrombocythaemia, were $17.1 million, a 56% increase on Q1 2000 sales of $11.0 million, when sales were slightly below trend due to wholesaler de-stocking. Shire achieved a prescription share of 20.4% of the total US Agrylin, Hydrea and generic hydroxyurea market in March 2001, compared to 14.3% for the month of March 2000. Sales of Pentasa*, for the treatment of ulcerative colitis, were $14.4 million, 39% higher than the comparable period last year, when sales were below trend due to wholesaler de-stocking following a price increase in Q4 1999. Pentasa* had a prescription share of 17.8% of the US oral mesalamine/olsalazine market in March 2001, compared to 18.0% in March 2000. Sales of ProAmatine*, for the treatment of postural hypotension, were $7.6 million, 112% higher than Q1 2000 sales of $3.6 million, when sales were also below trend due to wholesaler de-stocking following a price increase in Q4 1999. The US prescription market for ProAmatine* and Florinef prescriptions indicates that ProAmatine* had a 22.1% share for the month of March 2001, an increase from 19.5% in March 2000. Carbatrol*, containing carbamazepine, recorded sales growth of 72% from sales of $5.6 million in Q1 2000 to $9.6 million in Q1 2001. This translates to 32.5% of the US extended release carbamazepine prescription market in March 2001, compared to 26.0% in March 2000. Licensing Licensing and development fees in the first quarter fell by 38% to $3.0 million (Q1 2000: $4.9 million) and included one-time receipts of third party milestone payments in respect of Reminyl* Food and Drug Administration (FDA) approval and SLI drug delivery contracts. The quarter on quarter decrease is mainly due to the reduction in development stage activities for Reminyl* and hence the ending of reimbursement revenues for actual costs incurred on bulb-related raw material. Royalties increased by $0.3 million to $0.9 million (Q1 2000: $0.6 million). Cost of sales and operating expenses Gross margin on product sales, at 82%, was consistent with Q1 2000. The higher margin products, particularly Adderall* and Agrylin* represented approximately 57% of total product sales in Q1 2001, also consistent with Q1 2000. R&D expenditure for the first quarter increased by 4% to $27.2 million. Expressed as a percentage of revenues, R&D expenditure was 17% in Q1 2001 compared to 22% in Q1 2000 and 21% for full year 2000. R&D expenditure was particularly high in Q1 2000 due to the upfront payment for the in-licensing of SPD 421 from D-Pharm. The relatively low R&D to revenue ratio in Q1 2001 is mainly related to phasing of project costs resulting in lower than usual costs during the quarter. Selling, general and administrative (S,G&A) expenses, excluding the effects of an APB25 charge, increased by 41% to $49.5 million (Q1 2000: $35.2 million). As a percentage of product sales S,G&A expenses increased by 2% to 33%. This increase reflects the growth in the US sales force since Q1 2000 and increased marketing activities in respect of the anticipated Adderall XR* launch. The APB25 charge for the quarter was $2.1 million. This substantial reduction compared to the Q1 2000 charge of $23.2 million reflects minor amendments to the executive share option scheme effective from March 2000. Depreciation and amortisation increased by 13% to $8.6 million (Q1 2000: $7.6 million). This increase is attributable to the purchase of several new products since March last year. Taxation The effective rate of tax on the profits for the quarter pre APB25 is 30% (Q1 2000: 29%). The company has recorded net deferred tax assets of approximately $26.8 million. Cash flow Net cash inflow from operating activities of $58.0 million provided funding for two product acquisitions in Europe ($18.3 million) and tangible fixed asset additions of $1.5 million. Cash inflow from financing activities of $2.1 million related to employee stock option exercises. Cash, cash equivalents, marketable securities and other current assets at 31 March 2001 amounted to $225.4 million. After deduction of borrowings this gives a net cash position of $97.5 million. PROJECTS UNDER DEVELOPMENT Central nervous system disorders Alzheimer's disease Reminyl* was launched in the UK in September 2000. In January 2001, the UK National Institute of Clinical Excellence (NICE) announced that treatments for Alzheimer's disease should be made available as part of the management of patients with mild to moderate Alzheimer's disease within the UK. This was followed on 28 February 2001 by approval from the Food and Drug Administration (FDA) for Reminyl* in the US. Janssen Pharmaceutica and Ortho-McNeil Pharmaceutical will be marketing Reminyl* in this market and intend to make the product available on prescription from May 2001. By 31 March 2001, Reminyl* had been launched in 11 countries, including the UK and Ireland. A number of further launches are planned over the coming months. ADHD New pivotal data on the once daily formulation of Adderall*, SLI 381, under development for the treatment of ADHD, have been accepted as a platform presentation at the annual meeting of the American Psychiatric Association (APA). The oral presentation of safety and efficacy results will take place on Wednesday, 9 May, at 11:00 am at the APA's 2001 annual meeting in New Orleans, at which point Shire will publish the relevant posters. The once daily medication, currently known by its project designation, SLI 381 (proposed Trade Mark Adderall XR), is a novel formulation of Adderall* (mixed salts of a single-entity amphetamine product) that incorporates Shire's Microtrol(TM) advanced drug delivery system. Oncology/haematology Thrombocythaemia On 3 January 2001, Shire announced that the European Commission had granted orphan drug designation to anagrelide for the treatment of essential thrombocythaemia. This designation covers the EU, plus Norway and Iceland, and provides up to 10 years market exclusivity for the product following Marketing Authorisation Approval. Orphan drug status already applies to anagrelide in the US, where the product is marketed as Agrylin*, and in Japan where it will run for 10 years following marketing approval. Metabolic diseases Hyperphosphataemia The first regulatory submission for Foznol* (lanthanum carbonate) was delivered to a Reference Member State in the EU Mutual Recognition Procedure on 13 March 2001. Foznol is being developed for the treatment of hyperphosphataemia in patients with chronic renal failure. Future Prospects In respect of the proposed merger with BioChem Pharma Inc, although the current review period with Industry Canada expires on 27 April 2001, Shire requested an extension on 25 April 2001. Discussions with Industry Canada are ongoing and Shire remains firmly committed to obtaining the Canadian Minister of Industry's approval for the proposed merger with BioChem Pharma Inc. Progress towards the launch of Adderall XR* continues and this will lead to ongoing marketing expenditure. R&D expenditure as a percentage of revenue is expected to move back towards historic ranges in subsequent quarters. With the forthcoming US launch of Reminyl* expected and the recent regulatory filing for Foznol* in Europe, management remains confident about the company's future growth prospects. *Trade Mark Unaudited consolidated balance sheets US GAAP
31.03.2001 31.03.2000 $'000 $'000 ASSETS ----------- ----------- Current assets: Cash and cash equivalents 82,835 67,307 Marketable securities and other current asset investments 142,553 58,020 Accounts receivable, net 70,993 75,689 Inventories, net 43,773 39,828 Deferred tax asset 18,722 5,312 Prepaid expenses and other current assets 14,373 6,211 ------------ ------------ Total current assets 373,249 252,367 Investments 5,756 2,604 Property, plant and equipment, net 47,867 38,813 Intangible assets, net 561,458 550,536 Deferred tax asset 8,047 31,799 Other assets 21,850 5,058 ------------ ------------ Total assets 1,018,227 881,177 ------------ ------------ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current instalments of long-term debt 1,470 5,333 Accounts and notes payable 97,313 106,695 Other current liabilities 19,765 9,214 ------------ ------------ Total current liabilities 118,548 121,242 Long-term debt, excluding current instalments 126,436 128,040 Other long-term liabilities 11,532 541 ------------ ------------ Total liabilities 256,516 249,823 ------------ ------------ Shareholders' equity: Common stock, 5p par value; 400,000,000 (2000: 400,000,000) shares authorised; and 257,950,135 (2000: 251,376,841) shares issued and outstanding respectively 21,097 20,611 Additional paid-in capital 945,735 883,257 Accumulated other comprehensive losses (52,121) (13,122) Accumulated deficit (153,000) (259,392) ------------ ------------ Total shareholders' equity 761,711 631,354 ------------ ------------ Total liabilities and shareholders' equity 1,018,227 881,177 ------------ ------------
Unaudited consolidated income statements US GAAP 3 months 3 months to 31.03.01 to 31.03.00 $'000 $'000 ------------ ------------ Total revenues 155,641 118,978 Cost of revenues (27,713) (20,905) ------------ ------------ Gross profit 127,928 98,073 Operating expenses (88,010) (92,118) ------------ ------------ Operating income 39,918 5,955 Interest income 2,536 1,371 Interest expense (2,801) (3,405) Other expense (1,668) (431) ------------ ------------ Total other expenses (1,933) (2,465) ------------ ------------ Income before income taxes 37,985 3,490 Income taxes (12,030) (7,756) ------------ ------------ Net income/(loss) - see below 25,955 (4,266) ------------ ------------ Net income/(loss) per share: Basic 10.1c (1.7)c Diluted 9.9c (1.7) c Weighted average number of shares: Basic 257,390,769 246,672,276 Diluted 262,649,651 246,672,276 Supplemental information Net income/(loss) as above 25,955 (4,266) Add back: APB25 stock option compensation charg 2,121 23,246 ------------ ------------ Net income before APB25 28,076 18,980 ------------ ------------ Net income before APB25 per ordinary share Basic 10.9c 7.7c Diluted 10.7c 7.3c ------------ ------------ Net income before APB25 per ADS Basic 32.7c 23.1c Diluted 32.1c 22.0c ------------ ------------ The diluted net income before APB25 per ordinary share uses the fully diluted weighted average number of shares of 259,301,631. This is not used when the result is a net loss because it would have an anti-dilutive effect. Unaudited consolidated statements of cash flows US GAAP
3 months 3 months to 31.03.01 to 31.03.00 $'000 $'000 ---------- ---------- Cash flows from operating activities: Net income/(loss) 25,955 (4,266) Adjustments to reconcile net income/(loss) to net cash ---------- ---------- provided by/(used in) operating activities: Depreciation and amortisation 8,600 7,592 Stock option compensation 2,121 23,246 Tax benefit of stock option compensation, charged directly to equity 3,090 1,072 Non cash exchange gains and losses (10,311) (151) Loss on disposal of fixed assets 607 - Decrease/(increase) in inventory 3,336 (290) Decrease in deferred tax asset 6,500 - Decrease/(increase) in accounts receivable 18,816 (14,410) Decrease in accounts payable (668) (48,556) ---------- ---------- Net cash provided by/(used in) operating activities 58,046 (35,763) ---------- ---------- Cash flows from investing activities: Redemption of marketable securities, net 46,000 31,687 Increase in cash placed on short-term deposit (48,808) (5,363) Expenses of acquisition of subsidiaries - (212) Purchase of intangible fixed assets (18,335) - Purchase of fixed assets (1,544) (1,935) Collection on notes receivable - 520 ---------- ---------- Net cash (used in)/provided by investing activities (22,687) 24,697 ---------- ---------- Cash flows from financing activities: Movements on long term debt 94 (2,549) Proceeds from issue of common stock - 3,033 Payment of stock issuance costs (16) (3,385) Proceeds from exercise of options 2,109 27,192 ---------- ---------- Net cash provided by financing activities 2,187 24,291 ---------- ---------- Effect of foreign exchange rate changes on cash and cash equivalents (1,309) - ---------- ---------- Net increase in cash and cash equivalents 36,237 13,225 Cash and cash equivalents at beginning of period 46,598 54,082 ---------- ---------- Cash and cash equivalents at end of period 82,835 67,307 ---------- ----------
NOTES 1. Analysis of revenue, operating income and reportable segments The company has disclosed segmental information for the individual operating areas of the business, based on the way in which the business is managed and controlled. Shire's principal reporting segments are geographic, each being managed and monitored separately and serving different markets. The company evaluates performance based on operating income or loss before interest and income taxes.
Three months to March 31, 2001 Rest of US Europe World Total $'000 $'000 $'000 $'000 ---------- ---------- ---------- ---------- Product sales 126,804 18,330 6,270 151,404 Licensing and development 2,085 956 - 3,041 Royalties 60 358 503 921 Other revenues - - 275 275 ---------- ---------- ---------- ---------- Total revenue 128,949 19,644 7,048 155,641 ---------- ---------- ---------- ---------- Cost of revenues 17,877 6,529 3,307 27,713 Research and development 19,916 7,188 61 27,165 Selling, general and administrative 35,815 14,027 1,796 51,638 Losses on disposal of assets 591 14 2 607 ---------- ---------- ---------- ---------- Total operating expenses 74,199 27,758 5,166 107,123 ---------- ---------- ---------- ---------- EBITDA 54,750 (8,114) 1,882 48,518 Depreciation and amortisation (4,460) (4,135) (5) (8,600) ---------- ---------- ---------- ---------- Operating income/(loss) 50,290 (12,249) 1,877 39,918 ---------- ---------- ---------- ---------- Three months to March 31, 2000 Rest of US Europe World Total $'000 $'000 $'000 $'000 ---------- ---------- ---------- ---------- Product sales 93,102 15,243 4,820 113,165 Licensing and development 1,376 3,534 - 4,910 Royalties 44 561 - 605 Other revenues 3 - 295 298 ---------- ---------- ---------- ---------- Total revenue 94,525 19,338 5,115 118,978 ---------- ---------- ---------- ---------- Cost of revenues 12,955 5,730 2,220 20,905 Research and development 17,247 8,808 17 26,072 Selling, general and administrative 22,420 34,107 1,927 58,454 ---------- ---------- ---------- ---------- Total operating expenses 52,622 48,645 4,164 105,431 ---------- ---------- ---------- ---------- EBITDA 41,903 (29,307) 951 13,547 Depreciation and amortisation (3,718) (3,688) (186) (7,592) ---------- ---------- ---------- ---------- Operating income/(loss) 38,185 (32,995) 765 5,955 ---------- ---------- ---------- ----------
2. Net income/(loss) per share Basic net income/(loss) per share is based upon the net income/(loss) available to common stockholders divided by the weighted average number of common shares outstanding during the period. Diluted net income/(loss) per share is based upon income available to common stockholders divided by the weighted average number of common shares outstanding during the period and adjusted for the effect of all dilutive potential common shares that were outstanding during the period. The following table sets forth the computation for basic and diluted net income/(loss) per share: 3 months 3 months to 31.03.01 to 31.03.00 $'000 $'000 ------------- ------------- Numerator for basic net income per share 25,955 (4,266) Interest on convertible debt, net of tax 44 - ------------- ------------- Numerator for diluted net income per share 25,999 (4,266) ------------- ------------- No. of shares No. of shares ------------- ------------- Weighted average number of shares: Basic 257,390,769 246,672,276 Effect of dilutive stock options 4,666,975 - Convertible debt 591,907 - ------------- ------------- Diluted 262,649,651 246,672,276 ------------- ------------- Basic net income per share 10.1c (1.7)c ------------- ------------- Diluted net income per share 9.9c (1.7)c ------------- ------------- 3. Net product sales data 3 months 3 months 3 months 3 months to 31.03.01 to 31.03.00 to 31.03.01 to 31.03.01 $'000 $'000 % increase % of total ------------- ------------- ------------ ------------- Adderall* 70,146 54,539 +29% 46% Agrylin* 17,146 11,005 +56% 11% Pentasa* 14,400 10,347 +39% 10% Carbatrol* 9,639 5,592 +72% 6% Calciums 4,795 3,985 +20% 3% ProAmatine* 7,577 3,575 +112% 5% DextroStat* 1,628 2,312 -30% 1% OTC 7,325 5,801 +26% 5% Others 18,748 16,009 +17% 13% ------------- ------------- ------------ ------------- 151,404 113,165 34% 100% ------------- ------------- ------------ ------------- * Trade Mark Unaudited consolidated profit and loss accounts UK GAAP
3 months 3 months to 31.03.01 to 31.03.00 (pound)'000 (pound)'000 ------------ ------------ Turnover 108,115 74,471 Cost of sales (28,931) (14,038) ------------ ------------ Gross profit 79,184 60,433 Other operating expenses (54,359) (46,298) ------------ ------------ Operating profit 24,825 14,135 Finance charges, net (6,450) (1,247) ------------ ------------ Profit on ordinary activities before taxation 18,375 12,888 Taxation (1,744) (4,175) ------------ ------------ Profit on ordinary activities after taxation 16,631 8,713 ------------ ------------ Earnings per share - basic 6.5p 3.5p - diluted 6.3p 3.4p
All results included above relate to the continuing operations of the Group. Unaudited consolidated statement of total recognised gains and losses
3 months 3 months to 31.03.01 to 31.03.00 (pound)'000 (pound)'000 ------------ ------------ Profit for the period 16,631 8,713 Translation of overseas subsidiaries' financial statements 13,336 1,832 ------------ ------------ Total recognised gains and losses relating to the period 29,967 10,545 ------------ ------------
Unaudited consolidated balance sheets UKGAAP
31.03.01 31.03.00 (pound)'000 (pound)'000 ------------ ------------ Fixed assets Goodwill 441,105 463,825 Other intangible assets 271,846 215,445 Tangible assets 33,669 24,330 Fixed asset investments 4,230 1,632 ------------ ------------ 750,850 705,232 ------------ ------------ Current assets Stocks 30,789 24,966 Debtors - due within one year 60,056 54,508 - due after one year 15,369 - Investments 100,269 36,369 Cash at bank and in hand 58,265 42,191 ------------ ------------ 264,748 158,034 Creditors: amounts falling due within one year (83,415) (76,078) ------------ ------------ Net current assets 181,333 81,956 ------------ ------------ Total assets less current liabilities 932,183 787,188 Creditors: amounts falling due in more than one year (97,125) (80,574) ------------ ------------ Net assets 835,058 706,614 ------------ ------------ Capital and reserves Called-up share capital 12,898 12,569 Share premium 874,971 855,465 Capital reserve 2,755 2,755 Other reserves 24,247 24,247 Profit and loss account (79,813) (188,422) ------------ ------------ Equity shareholders' funds 835,058 706,614 ------------ ------------
Basis of preparation The accounts have been prepared in accordance with the accounting policies set out in the full UK statutory accounts for the year ended December 31, 2000. The results for the three months ended March 31, 2001 and 2000 have not been audited and do not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. Summary of significant differences between US generally accepted accounting principles followed by the Group and UK generally accepted accounting principles The Group's consolidated financial statements have been prepared under US GAAP, which differs in certain respects from UK GAAP. The principal differences between the Group's accounting policies under US GAAP and UK GAAP are set out in the tables below: Reconciliation of net income from US GAAP to UK GAAP
3 months 3 months 3 months 3 months to 31.03.01 to 31.03.00 to 31.03.01 to 31.03.00 $'000 $'000 (pound)'000 (pound)'000 --------------- -------------- ------------ ------------- Net income/(loss) as reported under US GAAP 25,955 (4,266) 17,853 (2,661) Adjustments to conform to UK GAAP: Merger accounting adjustments - restructuring costs charged to income (60) (60) (42) (36) Amortisation of capitalised goodwill 2,451 2,715 1,698 1,699 Amortisation under acquisition accounting (8,237) (9,120) (5,706) (5,706) Derecognition of deferred tax asset 6,500 - 4,573 - Stock option compensation costs 2,121 23,246 1,444 14,522 Tax benefit from exercise of non-qualified stock options 3,090 1,072 1,959 673 Difference in accounting for convertible debt (1) 354 (1) 222 Accrued taxes on share options 10 - 7 - Foreign exchange on US$ denominated liabilities - - (5,154) - --------------- -------------- ------------ ------------- Net income as reported under UK GAAP 31,829 13,941 16,631 8,713 --------------- -------------- ------------ -------------
Reconciliation of total shareholders' equity from US GAAP to UK GAAP
31.03.01 31.03.00 31.03.01 31.03.00 $'000 $'000 (pound)'000 (pound)'000 --------------- ----------- ----------- ------------ Total shareholders' equity as reported under US GAAP 761,711 631,354 535,777 395,760 Adjustments to conform to UK GAAP: Merger accounting adjustments - restructuring costs charged to income 110 350 77 218 Goodwill written off to reserves (191,215) (214,561) (134,497) (134,496) Goodwill amortisation 35,148 28,604 24,723 17,930 Net book value of goodwill on acquisition accounting for Roberts Pharmaceutical Corporation 607,605 718,271 427,386 450,243 Deferred tax (26,769) (37,111) (18,830) (23,263) Difference in accounting for convertible debt 464 354 327 222 Difference in valuation of fixed asset investments 258 - 181 - Accrued taxes on share options (123) - (86) - --------------- ----------- ----------- ------------ Total shareholders' equity as reported under UK GAAP 1,187,189 1,127,261 835,058 706,614 --------------- ----------- ----------- ------------
Earnings per share per UK adjusted results Earnings per share has been calculated by dividing the profit on ordinary activities after taxation for each period by the weighted average number of shares in issue during those periods, in accordance with FRS14. The weighted average number of shares used in calculating fully diluted earnings per share has been adjusted for the effects of all dilutive potential ordinary shares in accordance with FRS14. 3 months 3 months to 31.03.01 to 31.03.00 (pound)'000 (pound)'000 ----------------- ----------------- Profit for the period (for basic and diluted EPS) 16,631 8,713 Weighted average number of shares in issue for basic EPS 257,390,769 246,672,276 Number of dilutive potential shares 5,258,882 12,629,355 ----------------- ----------------- Total for fully diluted EPS 262,649,651 259,301,631 ----------------- -----------------